Convenience Begins To Trump Price In Online Packaged Travel Purchase Decisions

Convenience started to edge out price as the most effective decision driver for online travel package buyers in 2004. According to The PhoCusWright Consumer Travel Trends Survey Seventh Edition, 28% of those shoppers purchasing a combination of airline tickets and hotel accommodations from the same Web site said they did so to save time, compared to 27% who cited pricing discounts as their incentive.
The effect was even more pronounced among those who tended to be loyal to one site: Among those who used just one Web site to buy travel, 37% cited convenience versus 25% who looked for discounts. A substantial number of combination purchasers who purchased on multiple sites also aimed to save time (21%), but more (28%) were looking for better pricing. Curiously, among these “non-loyal” shoppers, 18% said earning additional loyalty reward points was the top reason for their combination purchase, while only 6% of the shoppers loyal to one Web site cited loyalty programs.

The study found that the number of adult Americans buying travel online increased by 14% in 2004 to 40 million. Among the 59 million adult Americans who said they had been online in the past month and had flown on a commercial airliner in the past year (defined as “online travelers”), 88% shop for travel online and 63% said they usually purchase travel via the Internet.

“Those subsegments of online travelers that have a significantly higher incidence of online travel shopping and purchasing tend to be the more seasoned travelers and savvy Internet veterans,” said PhoCusWright analyst and report author Susan Steinbrink. Specifically, she noted, those predisposed to both shop and purchase travel online tend to purchase combinations of components, favor online travel agencies, use multiple sites to purchase trip components, and be men under the age of 45.

Among other notable findings are:

There was a higher incidence of online hotel purchasing in 2004 versus 2003 (71% versus 60%), approaching that of air purchases (92% in both years).

Half of all online combination purchases consist of air and hotel, 24% are air, hotel and car, 23% are air and car, and just 4% are hotel and car.

More hotel chains are pushing their way onto the list of the top three Web sites used for hotel reservations, as Hilton and Marriott outpaced Hotels.com and Priceline, and contributed to declines for Expedia and Travelocity.

Business travel rebounded, with 44% of respondents saying they had taken a flight on business, up from 33% in 2003 (and favorably comparing to the flat 90-91% who flew for leisure trips).

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The PhoCusWright Consumer Travel Trends Survey Seventh Edition contains 43 pages and 45 tables. Further information including the complete list of tables, overview, demographic profile of study participants and questionnaire is available.
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